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JewishJournal.com

December 16, 2008

Class-action suit filed in Madoff case also names L.A.’s Stanley Chais

http://www.jewishjournal.com/blog/item/class-action_suit_filed_in_madoff_case_also_names_las_stanley_chais_2008121/

The race by plaintiffs' attorneys to sign up victims of the Bernard L. Madoff investment fraud is off and running.

Hagens Berman Sobol Shapiro (HBSS), a Seattle-based law firm, issued a news release this afternoon alerting potential clients that it has already filed a class-action lawsuit and is now open to speaking with those who “wish to join this suit, discuss this action, or have any questions concerning …your rights or interests.”

HBSS, which also has offices in Los Angeles, San Francisco and other cities, said its complaint was filed yesterday in the U.S. District Court for the Central District of California.

The suit, which appears to be the first what of what are certain to be an avalanche of similar civil actions, is noteworthy in part because it names as defendants not only Bernard Madoff Investment Securities (BMIS), but also Los Angeles investor and philanthropist Stanley Chais and legal entities Chais is said to control.

The lawsuit describes Chais and his Brighton Company as an “alleged feeder fund” which channeled investors’ monies to BMIS and, so the suit claims, “engaged in a Ponzi scheme, defrauding investors of billions of dollars.”

HBSS, the law firm, contended in its news release that Chais or the Brighton Company was “one of the many alleged feeder funds,” adding that “all defendants contributed to the false, misleading, unlawful, unfair and fraudulent acts and practices associated with the Ponzi scheme.”

In an interview with The Jewish Journal yesterday, Chais said that he was a victim of Madoff no less so than others who placed their trust in Madoff and were betrayed. Chais claimed that he and his family personally lost “a huge amount of money.” Moreover, his Chais Family Foundation, which provided millions of dollars annually to global Jewish causes, lost all of its funds in the Mandoff scheme and shut down on Sunday.

HBSS said it is also “investigating the actions of other feeder firms on behalf of investors.”

Although The Jewish Journal has not seen a copy of the HBSS suit, if it follows precedent it is most likely a “placeholder” legal action, long on allegations and short on specifics. The law firm no doubt hopes that publicity concerning its actions will bring plaintiffs and investigative leads out of the woodwork.

Indeed, HBSS lists the names of two of its attorneys, Steve Berman (206-623-7292) and Reed Kathrein (510-725-3000), along with a Madoff specific email, Madoff@hbsslaw.com, for those who wish to contact them.

In addition to civil complaints such as this, Madoff and BMIS face criminal and Securities and Exchange Commission charges. To date, neither Chais nor any of his legal entities have been accused of wrongdoing by the government.

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